Remortgaging Could Help Lower Repayments | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

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Derin Clark

Derin Clark

Online Reporter
Published: 23/03/2021
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One in three mortgage borrowers who have faced financial hardship due to the pandemic are planning to revert to their lender’s standard variable rate (SVR) when their mortgage term ends, which could see their monthly repayments increase at a time when many are looking to reduce outgoings. Instead, homeowners coming to the end of their fixed rate mortgage term, or who are already on their lender’s SVR, should consider remortgaging as it could reduce their monthly costs.

The research, which was carried out by Legal & General, found that many mortgage borrowers considering reverting to their lender’s SVR are planning to do so due to concerns about lenders scrutinising their finances in more depth compared to before the pandemic. In addition to this, the research found that one in two (50%) are concerned that their decision to take a payment holiday will impact their future mortgage options and two-thirds (67%) believe it will be harder to get a mortgage when furloughed.

However, as Eleanor Williams, finance expert at explains, these homeowners should consider speaking to a mortgage broker as there are lenders who will be willing to offer remortgages to those who have been impacted negatively by the pandemic. She said: “Undoubtedly, although there may be those currently struggling financially, it would be unwise for borrowers to assume that they would not be eligible for a new mortgage, even if their existing lender is unable to offer a new deal. Seeking independent advice from a broker who is up to date on the ever-changing mortgage sector could unveil options which may save them significant sums. There are “furlough friendly” lenders who may be able to assist, lenders who may have different lending criteria to their current provider, and some brokers may have access to deals which borrowers cannot obtain directly.”

Homeowners considering remortgaging should consider speaking to our preferred mortgage broker Mortgage Advice Bureau for tailored advice and support.

How much could you save remortgaging?

The current average SVR stands at 4.41%. Back in March 2019, the average rate on a two year fixed deal was 2.49%, which would mean that those coming off a two year fixed deal would see their average rate increase by 1.92% simply by reverting onto an SVR. Meanwhile, back in March 2016 the average five year fixed rate stood at 3.24%, which would mean that borrowers would see an average increase of 1.17% on their mortgage rate when reverting to their lender’s SVR.

Mortgage borrowers can see how the increase onto the SVR will impact their monthly repayments using our mortgage repayment calculator.

While reverting to a lender’s SVR will likely see mortgage repayments rise, homeowners may find that they are able to reduce mortgage repayments by switching onto a new fixed term remortgage deal. Those who locked into a five year deal back in March 2016 when the average rate stood at 3.24% will be pleased to see that the average five year fixed rate now stands at 2.75% – 0.49% lower than five years ago.

In the two years since 2019, the average two year fixed rate has increased by 0.08% to now stand at 2.57%. Although this is slightly higher than the average rate available in March 2019, it is still 1.84% lower than the average SVR.

As well as this, depending on the amount of equity the borrower owns in their home, lower rates could be available in the charts. Homeowners should visit our remortgage charts to compare all the deals available.

When considering remortgaging, borrowers should also take into account the cost of the remortgage deal’s product fee, but as Williams explains, the cost of the product fee should not put borrowers off remortgaging as there are many deals available that do not charge product fees. She said: “Those who feel put off remortgaging due to concerns around finding funds to meet associated costs should note that while the percentage of the market offering fee-free deals has reduced by 6% year-on-year, there are many products available without a fee, and at 2.75%, the average rate for fee-free fixed rates is lower than the average for those which do charge a fee (2.92%). Equally, there are still many options which could help to reduce upfront costs, with the proportion of the market offering various incentive packages remaining fairly stable year-on-year. The right mortgage is about more than just the initial rate offered, and advice could be invaluable in assessing what may be the best route forwards for an individual’s circumstances.”


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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